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Orion Marine Group, Inc. Reports Fourth Quarter And Full Year 2012 Results

Stocks in this article: ORN

HOUSTON, Feb. 28, 2013 (GLOBE NEWSWIRE) -- Orion Marine Group, Inc. (NYSE:ORN) (the "Company"), a leading heavy civil marine contractor, today reported net income for the three months ended December 31, 2012, of $1.5 million ($0.05 diluted earnings per share). These results compare to a net loss of $5.2 million ($0.19 diluted loss per share) for the same period a year ago. For the full year 2012, Orion Marine Group reported a net loss of $11.9 million ($0.44 diluted loss per share), which compares to a 2011 net loss of $13.1 million ($0.49 diluted loss per share).

"2012 was a validation of our ability to adapt our operating strategy to the prevailing market conditions," said Mike Pearson, Orion Marine Group's President and Chief Executive Officer. "While several challenging factors continued during 2012, our bidding strategy was successful in growing backlog and increasing equipment utilization. This strategy produced continued gross margin and top line improvement throughout the year and delivered positive quarterly net income for the first time since the beginning of 2011. We are pleased to see the results of all the hard work and dedication from the entire Orion Marine Group team come to fruition in the fourth quarter."

Financial highlights of the Company's fourth quarter and full year 2012 include:

Fourth Quarter 2012

  • Fourth quarter 2012 contract revenues were $98.6 million, an increase of 78.3%, as compared with fourth quarter of 2011 revenues of $55.3 million.  
  • Gross profit for the quarter was $12.5 million which represents an increase of $12.2 million as compared with the fourth quarter of 2011. Gross profit margin for the quarter was 12.7%, which was higher than the prior year period of 0.6%. During the fourth quarter 2012, gross margin improved due to the continued improvement in utilization of construction equipment and several short term private sector projects involving dredging services.  
  • Selling, General, and Administrative expenses for the fourth quarter 2012 were $6.8 million as compared to $7.9 million in the prior year period. The decrease is attributed in part to the reduction of professional fees and continued cost containment measures.   
  • The Company self-performed approximately 83% of its work as measured by cost during the fourth quarter of 2012, as compared with 89% during the prior year period. 
  • The Company's fourth quarter 2012 EBITDA was $9.4 million, representing a 9.5% EBITDA margin, which compares to fourth quarter 2011 EBITDA of negative $2.0 million, or a negative 3.6% EBITDA margin. 

Full Year 2012

  • Full year 2012 contract revenues were $292.0 million, an increase of 12.4% year-over-year as compared with full year 2011 revenues of $259.9 million. 
  • Gross profit for the year was $14.4 million, which represents an increase of $4.1 million as compared with the full year 2011. Gross profit margin for the year was 4.9%, which was up slightly from 3.9% for the full year 2011. The year over year increase in gross profit margin was primarily related to better utilization of equipment, particularly in the second half of the year, and the mix of jobs in progress as compared to the prior year.
  • The Company self-performed approximately 83% of its work as measured by cost during 2012 as compared with 86% during the prior year period. 
  • Selling, General, and Administrative expenses for the full year 2012 were $28.6 million as compared with $29.5 million in the prior year period. The decrease in Selling, General and Administrative expenses is due in part to the Company's cost containment measures, the reduction of professional fees and a decrease in self insurance expense.
  • The Company's full year 2012 EBITDA was $5.8 million, representing a 1.9% EBITDA margin, which compares to full year 2011 EBITDA of $3.0 million, or a 1.2% EBITDA margin. 

Backlog of work under contract as of December 31, 2012 was $184.1 million, which compares with backlog under contract at December 31, 2011 of $164.5 million. The full year 2012 book-to-bill ratio was 1.07 times.  Subsequent to the end of the year, the Company has been successful in continuing to obtain additional awards for new work. The Company reminds investors that backlog can fluctuate from period to period due to the timing and execution of contracts. Given the typical duration of the Company's projects, which range from three to nine months, the Company's backlog at any point in time usually represents only a portion of the revenue it expects to realize during a twelve month period. Backlog consists of projects under contract that have either (a) not been started, or (b) are in progress and not yet complete, and the Company cannot guarantee that the revenue projected in its backlog will be realized, or, if realized will result in earnings. 

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